Relief from Judgment - Distirbution of Pension
ę 1995 National Legal Research Group, Inc.
Extrinsic Fraud. In a recent California case, a wife who had been misled about the value of her husband's pension benefits failed to win modification of the judgment. In re Marriage of Melton , 28 Cal. App. 4th 931, 33 Cal. Rptr. 2d 761 (1994). In the parties' dissolution proceedings, the administrator of the husband's professional baseball pension plan provided incorrect information about the husband's projected benefits. Based on this information, the wife agreed to accept a specified amount as her one-half share of the monthly retirement payments, and the stipulated judgment reflected that agreement. When the husband retired and the wife found out that his payments were actually much larger than expected, she sought relief from the judgment. The trial court found no extrinsic fraud but, relying on its inherent equitable powers, it awarded the wife one-half of the husband's benefits.
The California appeals court held that the husband's conduct, while it may have been "sharp practice," did not involve extrinsic fraud so as to warrant relief from judgment. A party's representation of the value of an asset, favorable to himself, does not constitute extrinsic fraud, the court said. Although the husband did misrepresent the projected value of his future pension benefits, with the assistance of the plan administrator, the wife's attorney had a copy of the pension plan and could have discovered, in the exercise of reasonable diligence, that the plan was amended by increasing benefits from time to time. Furthermore, her counsel could have conducted discovery on the plan to find out what the husband's projected benefits would be.
The court went on to hold, however, that the wife was entitled to a division of the value of the pension above what had already been divided. Only a portion of the husband's pension was explicitly divided by the stipulated judgment, and the remainder was left undivided. There was no reason why the omitted portion should not be treated as an omitted asset, the court decided, remanding for this purpose.
Unlike courts in California and other community property jurisdictions, courts in equitable distribution states generally cannot divide omitted assets. Hence, the rationale of In re Marriage of Melton would not avail a party whose spouse misrepresented the value of an asset during equitable distribution proceedings.
Erroneous Projections. Modification of an order distributing retirement benefits is improper, even if the original order was based on erroneous projections, where there is no evidence that the error was the result of a postdecree event or otherwise could not have been anticipated, according to the New Mexico Court of Appeal. Barnes v. Shoemaker , 117 N.M. 59, 868 P.2d 1284 (Ct. App. 1984).
Postdivorce Events. The parties' divorce decree in Stine v. Stine , ___ Ariz. ___, 880 P.2d 142 (Ct. App. 1994), awarded the wife a fractional share of the husband's retirement benefits. At the time of the divorce, he was eligible to retire but had not yet done so. A few weeks later, he quit his job, received reimĘbursement for his contributions, paid the wife her share, and then was rehired. Even though he could be reinstated in the plan by repaying all of the contributions disbursed to him when he quit, he refused to do so. The wife sought relief, but the trial court found that the husband had not violated the decree, and the appeals court agreed. The decree did not preclude him from quitting his job and then forgoing reinstatement of his benefits when he was rehired, the court decided. The husband satisfied his obligations under the decree by paying the wife her share of the benefits he had received, the court said.